Abstract
Purpose
Agricultural producers rely on debt capital to support many functions of their enterprise, yet private credit markets are frequently characterized by an imbalance between supply and demand. As a result, a number of public lending programs exist to mitigate the perceived market failures of private credit markets that serve agricultural producers. The paper aims to discuss these issues.
Design/methodology/approach
This study uses a structural disequilibrium model to examine the potential for excess demand or supply in the private market for non-real estate farm loans between 1978 and 2014.
Findings
The model demonstrates that the market is frequently characterized by disequilibrium, fluctuating between periods of excess demand and excess supply. These disequilibrium periods motivate the discussion of public intervention as a policy proposal within the agricultural sector.
Originality/value
This study uses traditional disequilibrium modeling to evaluate the private credit market for agriculture lending in a manner that has not been attempted previously in the literature. The model uses maximum likelihood methods with non-linear solution algorithms to investigate excess supply and demand in the sector.
Subject
Agricultural and Biological Sciences (miscellaneous),Economics, Econometrics and Finance (miscellaneous)
Reference38 articles.
1. The credit crunch in East Asia: what can bank excess liquid assets tell us?;Journal of International Money and Finance,2000
2. The market for lemons: qualitative uncertainty and the market mechanism;Quarterly Journal of Economics,1970
3. A note on a fair and Jaffee model;Econometrica,1974
4. Barajas, A. and Steiner, R. (2002), “Credit stagnation in Latin America”, Working Paper No. WP/02/53, International Monetary Fund, Washington, DC.
Cited by
4 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献